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Lennar Corporation, founded in 1954, is one of the nation's largest builders of quality homes for all generations. The company builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar entities include Financial Services, Rialto Investments, Multifamily and Commercial segments.

Lennar's core principles of Quality, Value and Integrity is the underlying foundation upon which we were built. When we care for our company, our customers and our associates, we know that our shareholders receive the best results.

Lennar Corporation (LEN)

$43.37  -0.01 (0.02%)

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Allison Bober

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Miami, Florida 33172
305-559-4000 - Phone
305-229-6452 - Fax

Allison.Bober@lennar.com

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    Lennar Reports First Quarter EPS of $0.14

    MIAMI, March 29, 2011 /PRNewswire via COMTEX/ --

    • Revenues of $558.0 million - down 3%
    • Net earnings of $27.4 million, or $0.14 per diluted share, compared to net loss of ($6.5) million, or ($0.04) per diluted share
    • Lennar Homebuilding operating earnings of $35.5 million, compared to $5.5 million
    • Gross margin on home sales of 20.0% - improved 80 basis points
    • S,G&A expenses as a % of revenues from home sales of 16.4% - up 60 basis points
    • Operating margin on home sales of 3.6% - improved 20 basis points
    • Lennar Financial Services operating earnings of $1.2 million, compared to a loss of ($0.9) million
    • Rialto Investments operating earnings of $11.0 million (net of $12.0 million of net earnings attributable to noncontrolling interests), compared to a loss of ($1.0) million
    • Deliveries of 1,923 homes - down 4%
    • New orders of 2,267 homes - down 12%; cancellation rate of 17%
    • Backlog of 1,948 homes - down 12%
    • Lennar Homebuilding cash and cash equivalents of $1.0 billion
    • Lennar Homebuilding debt to total capital, net of cash and cash equivalents, of 44.5%

    Lennar Corporation (NYSE: LEN and LEN.B),one ofthe nation's largest homebuilders, today reported results for its first quarter ended February 28, 2011. First quarter net earnings attributable to Lennar in 2011 were $27.4 million, or $0.14 per diluted share, compared to a first quarter net loss attributable to Lennar of ($6.5) million, or ($0.04) per diluted share, in 2010.

    Stuart Miller, President and Chief Executive Officer of Lennar Corporation, said, "We are pleased to report EPS of $0.14 for our first fiscal quarter of 2011, making this our fourth consecutive quarter of profitability. We were able to achieve these positive results, despite operating in a challenging housing market."

    Mr. Miller continued, "During the quarter, we remained focused on the core fundamentals of our business, generating profitable results in each of our business segments. Our homebuilding segment continued to produce strong gross margins, benefiting from our intense focus on controlling construction costs and opening new high margin communities. Although S,G&A expenses increased as a percentage of revenues from home sales, they continued to decline in absolute dollars. Our Rialto segment continued to produce healthy profits, generating $11.0 million of operating earnings in the first quarter."

    Mr. Miller concluded, "Our strong balance sheet and significant liquidity puts us in an excellent position to purchase new strategic high margin land deals for our homebuilding business and distressed opportunities for our Rialto business. While it is unclear whether the spring selling season will gain momentum or continue its sluggish recovery, we are confident that our company is well positioned for a profitable year in 2011."

    RESULTS OF OPERATIONS


    THREE MONTHS ENDED FEBRUARY 28, 2011 COMPARED TO

    THREE MONTHS ENDED FEBRUARY 28, 2010

    Lennar Homebuilding

    Revenues from home sales decreased 11% in the first quarter of 2011 to $457.9 million from $513.3 million in 2010. Revenues were lower primarily due to a 7% decrease in the average sales price of homes delivered and 4% decrease in the number of home deliveries, excluding unconsolidated entities. New home deliveries, excluding unconsolidated entities, decreased to 1,903 homes in the first quarter of 2011 from 1,988 homes last year. There was a decrease in home deliveries in Homebuilding Other and all of the Company's Homebuilding segments except for the Company's Homebuilding East segment. The average sales price of homes delivered decreased to $240,000 in the first quarter of 2011, primarily in the Company's Homebuilding West segment, from $258,000 in the same period last year. Sales incentives offered to homebuyers were $33,100 per home delivered in the first quarter of 2011, or 12.1% as a percentage of home sales revenue, compared to $37,100 per home delivered in the same period last year, or 12.5% as a percentage of home sales revenue.

    Gross margins on home sales were $91.7 million, or 20.0%, in the first quarter of 2011, compared to $98.4 million, or 19.2%, in the first quarter of 2010. Gross margin percentage on home sales improved compared to last year, primarily due to reduced sales incentives offered to homebuyers as a percentage of revenues from home sales. Gross profits on land sales totaled $2.5 million in the first quarter of 2011, compared to $1.4 million in the first quarter of 2010.

    Selling, general and administrative expenses decreased by $5.7 million, or 7%, in the first quarter of 2011, compared to the same period last year. Selling, general and administrative expenses in the first quarter of 2011 included $8.0 million related to the receipt of a settlement discussed below, offset by $6.6 million related to expenses associated with remedying pre-existing liabilities of a previously acquired company. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 16.4% in the first quarter of 2011, from 15.8% in the first quarter of 2010.

    Lennar Homebuilding equity in earnings (loss) from unconsolidated entities was $8.7 million in the first quarter of 2011, which included the Company's share of a gain on debt extinguishment at one of Lennar Homebuilding's unconsolidated entities totaling $15.4 million, partially offset by $4.5 million of valuation adjustments related to assets of Lennar Homebuilding's unconsolidated entities. In the first quarter of 2010, Lennar Homebuilding equity in earnings (loss) from unconsolidated entities was ($8.9) million.

    Lennar Homebuilding other income, net, totaled $30.0 million in the first quarter of 2011, which included $29.5 million related to the receipt of a settlement. The parties to certain litigation in which the Company was plaintiff entered into a settlement agreement in which they agreed the Company may make the following statement: "Lennar recently settled litigation against a third party in connection with Lennar's ongoing dispute with Nicolas Marsch, III and his affiliates. As a result of the settlement, the third party paid Lennar total cash consideration of $37.5 million and that the terms are confidential." Lennar Homebuilding other income, net, in the first quarter of 2011 also included the recognition of $10.0 million of previously deferred management fee income related to one of Lennar Homebuilding's unconsolidated entities. In addition, Lennar Homebuilding other income, net, included $13.1 million of valuation adjustments to the Company's investments in Lennar Homebuilding's unconsolidated entities. In the first quarter of 2010, Lennar Homebuilding other income, net, was $14.2 million.

    Homebuilding interest expense was $35.8 million in the first quarter of 2011 ($13.5 million was included in cost of homes sold, $0.2 million in cost of land sold and $22.1 million in other interest expense), compared to $33.2 million in the first quarter of 2010 ($14.3 million was included in cost of homes sold, $0.2 million in cost of land sold and $18.7 million in other interest expense). Interest expense increased due to an increase in the Company's outstanding debt compared to the same period last year.

    Sales of land, Lennar Homebuilding equity in earnings (loss) from unconsolidated entities, Lennar Homebuilding other income, net and net earnings (loss) attributable to noncontrolling interests may vary significantly from period to period depending on the timing of land sales and other transactions entered into by the Company and unconsolidated entities in which it has investments.

    Lennar Financial Services

    Operating earnings for the Lennar Financial Services segment were $1.2 million in the first quarter of 2011, compared to an operating loss of ($0.9) million in the first quarter of 2010. The increase in profitability was primarily due to higher profits per loan in the segment's mortgage operations and reduced costs in the segment's title operations.

    Rialto Investments

    In the first quarter of 2011, operating earnings for the Rialto Investments segment were $23.0 million (which included $12.0 million of net earnings attributable to noncontrolling interests), compared to an operating loss of ($1.0) million in the same period last year. In the first quarter of 2011, revenues in this segment were $33.6 million, which consisted primarily of accretable interest income associated with the segment's portfolio of real estate loans, compared to revenues of $0.3 million in the same period last year. In the first quarter of 2011, Rialto Investments other income, net, was $13.2 million, which consisted primarily of gains from acquisition of real estate owned through foreclosure. The segment also had equity in earnings from unconsolidated entities of $4.5 million during the first quarter of 2011, consisting primarily of interest income and unrealized gains related to the Company's investment in the AllianceBernstein L.P. fund formed under the Federal government's Public-Private Investment Program, compared to equity in earnings from unconsolidated entities of $0.1 million in the same period last year. In the first quarter of 2011, expenses in this segment were $28.3 million, which consisted primarily of costs related to its portfolio operations, underwriting expenses related to both completed and abandoned transactions, and other general and administrative expenses, compared to expenses of $1.4 million in the same period last year.

    Corporate General and Administrative Expenses

    Corporate general and administrative expenses increased by $0.7 million, or 3%, in the first quarter of 2011, compared to the first quarter of 2010. As a percentage of total revenues, corporate general and administrative expenses increased to 4.2% in the first quarter of 2011, from 3.9% in the first quarter of 2010.

    Noncontrolling Interests

    Net earnings (loss) attributable to noncontrolling interests were $11.3 million and ($1.0) million, respectively, in the first quarter of 2011 and 2010. Net earnings attributable to noncontrolling interests during the first quarter of 2011 were primarily related to the FDIC's interest in the portfolio of real estate loans that the Company acquired in partnership with the FDIC.

    Lennar Corporation, founded in 1954, is one of the nation's leading builders of quality homes for all generations. The Company builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides primarily mortgage financing, title insurance and closing services for both buyers of the Company's homes and others. Lennar's Rialto Investments segment is focused on distressed real estate asset investments, asset management and workout strategies. Previous press releases and further information about the Company may be obtained at the "Investor Relations" section of the Company's website, www.lennar.com.

    Some of the statements in this press release are "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our business, financial condition, results of operations, strategies and prospects. You can identify forward-looking statements by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those described under the caption "Risk Factors" in Item 1A of our Annual Report on Form 10-K for our fiscal year ended November 30, 2010. We do not undertake any obligation to update forward-looking statements, except as required by Federal securities laws.

    A conference call to discuss the Company's first quarter earnings will be held at 11:00 a.m. Eastern Time on Tuesday, March 29, 2011. The call will be broadcast live on the Internet and can be accessed through the Company's website at www.lennar.com. If you are unable to participate in the conference call, the call will be archived at www.lennar.com for 90 days. A replay of the conference call will also be available later that day by calling 203-369-1162 and entering 5723593 as the confirmation number.

    LENNAR CORPORATION AND SUBSIDIARIES


    Selected Revenues and Operational Information

    (In thousands, except per share amounts)

    (unaudited)





    Three Months Ended




    February 28,




    2011


    2010







    Revenues:







    Lennar Homebuilding


    $

    466,709


    520,776


    Lennar Financial Services



    57,713


    53,365


    Rialto Investments



    33,623


    301



    Total revenues


    $

    558,045


    574,442







    Lennar Homebuilding operating earnings


    $

    35,488


    5,455

    Lennar Financial Services operating earnings (loss)



    1,183


    (901)

    Rialto Investments operating earnings (loss)



    23,002


    (959)

    Corporate general and administrative expenses



    (23,352)


    (22,640)

    Earnings (loss) before income taxes



    36,321


    (19,045)

    Benefit for income taxes



    2,405


    11,572

    Net earnings (loss) (including net earnings (loss) attributable








    to noncontrolling interests)



    38,726


    (7,473)


    Less: Net earnings (loss) attributable to








    noncontrolling interests



    11,320


    (950)

    Net earnings (loss) attributable to Lennar


    $

    27,406


    (6,523)







    Average shares outstanding:







    Basic



    184,155


    182,660


    Diluted



    194,859


    182,660







    Earnings (loss) per share:







    Basic


    $

    0.15


    (0.04)


    Diluted


    $

    0.14


    (0.04)







    Supplemental information:







    Interest incurred (1)


    $

    49,874


    45,872








    EBIT (2):








    Net earnings (loss) attributable to Lennar


    $

    27,406


    (6,523)



    Benefit for income taxes



    (2,405)


    (11,572)



    Interest expense



    35,825


    33,199



    EBIT


    $

    60,826


    15,104







    (1)


    Amount represents interest incurred related to homebuilding debt.

    (2)


    EBIT is a non-GAAP financial measure defined as earnings before interest and taxes. This financial measure has been presented because the Company finds it important and useful in evaluating its performance and believes that it helps readers of the Company's financial statements compare its operations with those of its competitors. Although management finds EBIT to be an important measure in conducting and evaluating the Company's operations, this measure has limitations as an analytical tool as it is not reflective of the actual profitability generated by the Company during the period. Management compensates for the limitations of using EBIT by using this non-GAAP measure only to supplement the Company's GAAP results. Due to the limitations discussed, EBIT should not be viewed in isolation, as it is not a substitute for GAAP measures.

    LENNAR CORPORATION AND SUBSIDIARIES


    Segment Information

    (In thousands)

    (unaudited)




    Three Months Ended



    February 28,



    2011


    2010






    Lennar Homebuilding revenues:






    Sales of homes

    $

    457,869


    513,348


    Sales of land


    8,840


    7,428



    Total revenues


    466,709


    520,776






    Lennar Homebuilding costs and expenses:






    Cost of homes sold


    366,199


    414,972


    Cost of land sold


    6,389


    6,075


    Selling, general and administrative


    75,175


    80,918



    Total costs and expenses


    447,763


    501,965

    Lennar Homebuilding operating margins


    18,946


    18,811

    Lennar Homebuilding equity in earnings (loss) from unconsolidated entities


    8,661


    (8,894)

    Lennar Homebuilding other income, net


    29,960


    14,203

    Other interest expense


    (22,079)


    (18,665)

    Lennar Homebuilding operating earnings

    $

    35,488


    5,455






    Lennar Financial Services revenues

    $

    57,713


    53,365

    Lennar Financial Services costs and expenses


    56,530


    54,266

    Lennar Financial Services operating earnings (loss)

    $

    1,183


    (901)






    Rialto Investments revenues

    $

    33,623


    301

    Rialto Investments costs and expenses


    28,349


    1,403

    Rialto Investments equity in earnings from unconsolidated entities


    4,525


    143

    Rialto Investments other income, net


    13,203


    -

    Rialto Investments operating earnings (loss)

    $

    23,002


    (959)

    LENNAR CORPORATION AND SUBSIDIARIES


    Summary of Deliveries, New Orders and Backlog

    (Dollars in thousands)

    (unaudited)



    At or for the


    Three Months Ended


    February 28, 2011

    February 28, 2010


    Homes


    Dollar Value

    Homes


    Dollar Value








    Deliveries:








    East

    823


    $ 186,309

    609


    $ 138,693


    Central

    312


    66,064

    317


    65,775


    West

    341


    110,992

    448


    175,330


    Houston

    219


    48,664

    346


    73,827


    Other

    228


    60,450

    284


    72,522



    Total

    1,923


    $ 472,479

    2,004


    $ 526,147


    Of the total home deliveries listed above, 20 homes with a dollar value of $14.6 million represent home deliveries from unconsolidated entities for the three months ended February 28, 2011, compared to 16 home deliveries with a dollar value of $12.8 million for the three months ended February 28, 2010.


    New Orders:








    East

    982


    $ 220,611

    970


    $ 211,363


    Central

    341


    71,120

    416


    84,979


    West

    388


    127,979

    454


    163,357


    Houston

    266


    59,653

    388


    82,552


    Other

    290


    82,177

    349


    86,357



    Total

    2,267


    $ 561,540

    2,577


    $ 628,608


    Of the total new orders listed above, 21 homes with a dollar value of $16.9 million represent new orders from unconsolidated entities for the three months ended February 28, 2011, compared to 9 new orders with a dollar value of $8.0 million for the three months ended February 28, 2010.


    Backlog:








    East

    916


    $ 225,287

    1,043


    $ 251,205


    Central

    283


    58,348

    266


    55,141


    West

    226


    74,825

    342


    132,341


    Houston

    292


    69,900

    291


    69,560


    Other

    231


    69,102

    262


    73,291



    Total

    1,948


    $ 497,462

    2,204


    $ 581,538


    Of the total homes in backlog listed above, 4homes with a backlog dollar value of $4.5 million represents the backlog from unconsolidated entities at February 28, 2011, compared to 2 homes with a backlog dollar value of $2.5 million at February 28, 2010.


    Lennar's reportable homebuilding segments and homebuilding other consist of homebuilding divisions located in:



    East:

    Florida, Maryland, New Jersey and Virginia



    Central:

    Arizona, Colorado and Texas (1)



    West:

    California and Nevada



    Houston:

    Houston, Texas



    Other:

    Georgia, Illinois, Minnesota, North Carolina and South Carolina


    (1) Texas in the Central reportable segment excludes Houston, Texas, which is its own reportable segment.

    LENNAR CORPORATION AND SUBSIDIARIES


    Supplemental Data

    (Dollars in thousands)

    (unaudited)





    February 28,

    November 30,

    February 28,




    2011

    2010

    2010









    Lennar Homebuilding debt


    $

    3,129,065

    3,128,154

    2,682,928



    Total stockholders' equity



    2,640,377

    2,608,949

    2,435,191




    Total capital


    $

    5,769,442

    5,737,103

    5,118,119



    Lennar Homebuilding debt to total capital



    54.2%

    54.5%

    52.4%









    Lennar Homebuilding debt


    $

    3,129,065

    3,128,154

    2,682,928



    Less: Lennar Homebuilding cash and cash equivalents



    1,014,000

    1,207,247

    732,386




    Net Lennar Homebuilding debt


    $

    2,115,065

    1,920,907

    1,950,542



    Net Lennar Homebuilding debt to total capital (1)



    44.5%

    42.4%

    44.5%




    (1)

    Net Lennar Homebuilding debt to total capital consists of net Lennar Homebuilding debt (Lennar Homebuilding debt less Lennar Homebuilding cash and cash equivalents) divided by total capital (net Lennar Homebuilding debt plus total stockholders' equity).

    SOURCE Lennar Corporation

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Marshall Ames

700 N.W. 107th Avenue
Miami, Florida 33172
800-741-4663 - Phone
305-228-8383 - Fax

Marshall.Ames@lennar.com

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